View from the Pop

Meet the iPod People

University President Lawrence H. Summers recently used morning prayers at Memorial Church to defend economics as a lens through which we can analyze our problems. I’m certain he was intending for us to apply economic principles to our gravest concerns—perhaps the pros and cons of dumping toxic waste on less-developed countries.

Regardless, I’ll take his cue and tackle the moral and economic dilemmas of an issue that is more frivolous and more immediate: the illegal downloading of digital music files.

Let’s start with the economist’s method of choice, the cost-benefit analysis (thank you, Ec. 10). The benefits are fairly straightforward: music for free. From that alone, it’s clear that we need to determine the major costs of downloading music in order to justify our pulling the plug.

The first cost, as the recording industry would have us believe, is the threat of litigation. According to The Boston Globe, the Recording Industry Association of America (RIAA) filed suit against 261 individuals for downloading. Balance that against the Globe’s estimate of 60 million people worldwide who use Kazaa, or four million per day. 60 million divided by 261 equals virtually no chance that you’ll ever be sued. So you can breathe—and continue downloading—easily.

But the RIAA’s objection to downloading music does have merit: the act is both illegal and immoral. “File-sharing” paints a rosy picture of a practice that differs little from swiping discs from a record store. Dance rhetorical circles until you’re breathless, but the principle remains that obtaining a song without the artist’s consent is theft. To those of us with consciences, then, downloading music has an additional moral cost; fortunately, there is a solution in pay-for-play websites like Apple’s iTunes and Buymusic.com.

I recently downloaded Madonna’s Immaculate Collection from Buymusic.com. After clicking on “Holiday,” I was greeted not with the familiar, exuberant hook, but with a pop-up message informing me that the files were corrupt—all of them. Holiday. Celebrate.

Although this glitch generated no small annoyance, I decided to try my luck again. This time, the download was successful, and I was soon getting my gangsta on with Fifty. But not on my MP3 player, because the files would play only on a few select brands of portable players. Tough luck, Philips. Add to this the fact that the number of burns per song is generally limited to about three, whereas one can burn bootlegged MP3s endlessly, and the option of downloading legally becomes even less tempting.

Thus we return, defeated, to the ranks of the economist. The ease of illegal downloading has exacted a severe toll on the music industry: according to the Globe, worldwide CD sales are projected to fall as much as 15% this year. Universal Music Group, recognizing the futility of litigation, is slashing CD prices from $18.98 to $12.98 beginning October 1. Apparently, the RIAA’s monopoly on pop music has ended and the consumer has finally taken the day.

But don’t be so quick to celebrate. Decreasing the price of CDs fails to address the greater issue of why people would ever choose to pay for something they can obtain for free. In the short run, consumers benefit; in the long run, however, record stores would close (like the former HMV Records on Brattle Street), and pop musicians would bypass Lou Perlman’s office for places in the Business School. With no money to be made, there will be no music industry in twenty-five years. Seems like we’ve finally identified a cost that trumps any benefit we might temporarily derive from downloading illegally.

So what’s the solution? As Universal has realized, CD prices need to come down—way down—to entice consumers and spare the record industry a slow death. Artists also need to recognize that consumers will no longer tolerate spending their money on CDs with two quality songs and ten filler tracks. Britney, I’m not buying …Baby One More Time if it means I have to listen to “E-Mail My Heart.” Get your ass off the cover of Us Weekly and into the recording studio, and we’ll talk.

If, however, we’ve moved permanently into the era of digital music, it would behoove legal sites to court consumers rather than to repel them with restrictions. Charge reasonable prices, make MP3’s compatible with all portable devices, offer a wider array of songs and artists, allow for unlimited burns, and consumers will be less likely to flee to Kazaa. But in return, we must face the inevitable: it’s time to start paying for our music again.